Feed-in tariff cuts
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Feed-in tariff cuts
Find out about the latest changes to the feed-in tariff, including payment rate cuts and whether it's still worth investing in solar panels.
The feed-in tariff (FIT) has been providing payments to owners of electricity-generating renewable energy technologies since 2010.
The initial FIT rates were generous, and the uptake of solar panels was faster than expected. As a result, the government decided that the rates for solar PV had to be cut to control costs.
Read on to find out more about the feed-in tariff cuts - including how it will affect you if you already have solar panels, and whether it's still worth investing in solar panels. Click on the question below to jump to its answer:
- How much has the feed-in tariff been cut?
- Are solar panels still a worthwhile investment?
- I already have solar panels – does this affect me?
- Is the feed-in tariff fixed if I want to install solar panels later?
- What about wind turbines and solar water heating?
The feed-in tariff was cut for new installations from 1 January 2016. Since then, the rates for new installations decrease every three months.
The rate for new installations between 1 July and 30 September 2018 is 3.93p per kWh.
Systems installed before the FIT was cut are not affected.
Find out how this affects what you get paid in our guide to feed-in tariff earnings and savings.
The lower FIT rates will mean a longer payback time for your solar panels.
If your home is particularly energy inefficient, you also have to consider how much it will cost to bring its Energy Performance Certificate level to D or above. This is the minimum level required to qualify for the higher rate of feed-in tariff. About half of all properties are already eligible for a D rating.
This makes solar PV a long-term investment, as you'll only make a profit once the system has paid for itself. The feed-in tariff is paid for 20 years.
However, if installation costs continue to fall and you pay less for your system, and/or if electricity prices continue to rise, the payback period will shorten.
Putting the £5,000 to £8,000 typical solar panel cost into an ISA for the same amount of time might lead to a higher annual rate of return.
Find out more in our guide to solar PV as an investment.
No. Solar PV systems that are already registered for the old feed-in tariff rates aren't affected. Any change to the feed-in tariff rates only affects new installations.
However, do make sure you're maximising your profit from your panels - read our expert advice on how to make the most of your solar panels.
No, the government reviews the FIT rates on a regular basis, and the generation tariff decreases every three months (see current and future rates in feed-in tariffs savings and earnings).
The FIT scheme is currently planned to run until March 2019. It’s unclear what will happen after this.
Wind turbines, hydroelectric and micro-combined heat and power systems are all eligible for the feed-in tariff and their rates have also been cut - but to a lesser extent. We've pulled together the latest rates for all eligible technologies in an easy-to-read table - feed-in tariff rates.
Solar thermal panels - which produce hot water rather than electricity - come under a separate government scheme that's designed to reward households for generating their own heat. Click to find out more about the Renewable Heat Incentive (RHI).
Where can I find out more?
If you are unsure about your options or have any further questions, contact the Energy Saving Trust advice line on 0300 123 1234.